INVESTMENT OPPORTUNITIES
1.0 INTRODUCTION
This a brief on the investment opportunities available and investment processes in Kenya.
The projects and programmes outlined are critical in the
realization of the Kenya vision 2030 goals and aspirations and which Kenya officially
launched in June 2008r. The Kenya vision 2030 aims to transform Kenya into a newly
industrializing, middle-income country providing a high quality life to all its citizens by
the year 2030. The vision 2030 presents an opportunity to the government to pursue
ambitious aspirations for national economic growth and development.
2.0 BACKGROUND
Kenya is situated in the Eastern part of the African Continent. The country lies between 5
degrees north and 5 degrees south latitude and between 24 and 31 degrees east longitude.
It is almost bisected by the equator. Ethiopia and Sudan border it to the North; Uganda to
the West; Tanzania to the South; Somalia to the northeast; and Indian Ocean to the
southeast.
Kenya has diverse physical features, which are a major source of tourist attraction.
These include: vast plains, which are home to world famous game parks and reserves; the
Great Rift Valley, which runs north to south and whose floor has provided potential for
geothermal power generation; Mount Kenya, the second highest mountain in Africa
which is about 5,199m above sea level and the only place on earth you can find snow on
the equotor; Lake Victoria, the largest freshwater lake on the continent and which
supports the fishing industry in the East Africa region; Lake Nakuru, another tourist
attraction because of its flamingos; Lake Magadi, famous for its soda ash; and a number
of major rivers, including Tana and Athi, Sondu-Miriu, which generate the hydropower
resources of the country.
Some parts of the country experience an equatorial kind of climate especially the central
highlands, whereas along the coastline it is mainly tropical. The country has a bimodal
type of climate. The arid and semi-arid lands depend mainly on livestock production.
3.0 ECONOMIC PERFORMANCE
Kenya is the most developed economy in Eastern Africa with a 2007 Gross Domestic
Product (GDP) of approximately USD 27 billion (at an exchange of USD 1 to Kshs
67). It is also the economic, commercial, and logistical hub of the entire East African
region. Kenya’s estimated population is 35.2 million and it is projected to grow to 60
million people in 2030. Kenya enjoys an extensive infrastructure, an extraordinarily welleducated, English speaking, multi-lingual population, and a strong entrepreneurial
tradition. It is also a very young country with almost 50% of Kenya’s population under
the age of 15.
The economy has in the past registered high growth rates of 6.4% and 7.0% in 2006, and
2007 respectively. The government has taken steps to enhance Kenya’s economic
competitiveness and democracy is flourishing.
THE KENYA VISION 2030 and its first five-year Medium Term Plan, 2008-2012
The Government of Kenya developed the Kenya Vision 2030 as the country’s new
development blueprint covering the period up to 2030. The vision aims to transform
Kenya into a newly industrializing, middle-income country providing a high quality life
to all its citizens by the year 2030.
The vision is based on three pillars: the economic, the social and the political. The
economic pillar aims to improve the prosperity of all Kenyans through an economic
development programme, covering all the regions of Kenya, and aiming to achieve an
average Gross Domestic Product (GDP) growth rate of 10% per annum for the next 20
years. The social pillar seeks to build a just and cohesive society with social equity in a
clean and secure environment. The political pillar aims to realize a democratic political
system founded on issue-based politics that respects the rule of law, and protects the
rights and freedoms of every individual in Kenyan society.
The Kenya Vision 2030 is to be implemented in successive five-year medium plans with
the first one, which is currently under implementation covering the period 2008 – 2012.
The Vision 2030 programmes provide a range of investment opportunities for both the
international and domestic private sector investors. The Kenya government invites all
these players to invest in Kenya.
WHY INVEST IN KENYA
Kenya is a desirable investment destination due to a number of key strengths that include
among others: its low cost, good quality labour, an attractive social environment,
excellent connectivity with major world-wide hubs and time zones that make it easy to
work with Europe and the USA. Indeed, Nairobi is the undisputed transportation hub of
Eastern and Central Africa and the largest city between Cairo and Johannesburg. The Port
of Mombasa is the most important deep-water port in the region, supplying the shipping
needs of more than a dozen countries.
Kenya’s financial and manufacturing industries, while relatively modest, are far and
away the most sophisticated in Eastern Africa. Its tourism industry, already one of the
most successful in the world, continues to expand. While Kenya’s mineral resources are
limited, it is attractive as a potentially important source of valuable materials such as
titanium, and at present huge sums are being invested in exploration in the India Ocean
Coastline and in Northern Regions of Kenya.
Other key strengths in investing in Kenya are:
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A strong and cooperative relationship between the government, the private sector
and development partners makes it conducive to attracting investments.
A fully liberalized economy without exchange or price controls. There are no
restrictions on domestic and foreign borrowing by residents and non-residents.
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A relatively well developed infrastructure and a deep pool of educated and skilled
manpower that have made the country the manufacturing, commercial and
financial hub in eastern and central Africa.
An attractive and comprehensive package of incentives offered to investors.
A leading tourism, wildlife and safari destination.
Membership of regional trading blocs like COMESA and the EAC, as well as
being a beneficiary country under the preferential trade and investment benefits
offered by the AGOA legislation of the USA and the ACP-Contonou agreements
with the AU.
The most developed exchange in the region the Nairobi Stock Exchange (NSE).
Favorable weather /Climate
Kenyan businesses encourage the use of mobile (cell) phones for doing business
and telemarketing.
Fixed lines and wireless mobile lines are relatively inexpensive. The electrical
current in Kenya is 240 volts, 50 hertz (cycles per second).
International firms can also use Kenya as their base to access and penetrate the
larger combined Eastern Africa and Central African market. These two have a
land area larger than China and a population larger than that of the U.S.
6.0 AVAILABLE INVESTMENT OPPORTUNITIES
Key business and investment opportunities in Kenya include the tourism, agriculture,
transport and infrastructure, manufacturing, Communications, Energy, building and
construction and pharmaceuticals sectors. Specific areas of interest to business are ecotourism, power generation equipment, telecommunications equipment, agricultural
inputs, and food processing and packaging equipment, road construction, cement
production, motor vehicles parts among others as enumerated below.
THE ENERGY SECTOR
The current peak electric power demand is estimated at 1,180 MW and it is projected to
grow at 7% annually over the next 10 years, to reach 2,263MW by 2018. This demand
growth is driven by an accelerated consumer connection policy and anticipated robust
economic growth performance. Annual Electricity consumer connections have continued
to rise sharply over the last three years from 67,105 in the Financial Year (FY) 2005/06
to 122,080 in FY 2006/07 and to 140,807 in FY 2007/08. The Government’s policy is to
connect at least one million new consumers in the next five years. To meet this projected
demand in electricity, the installed generating capacity will have to be raised from
1,180MW currently to 1,860MW by 2013 and to 2,600MW by 2018. These supply
projections have in-built reserve (security) margin of 15% above peak demand.
This projected growth rate in demand will require corresponding increases in capital
outlay to provide the needed incremental generation capacity and associated supply and
distribution infrastructure. It is envisaged that the private sector will play a key role in
providing the required capital either on its own or through Public Private Partnerships.
The projected growth in electricity demand, therefore, presents a golden opportunity to
invest in the energy sector. Highlighted here below are some of the priority projects that
present immediate opportunities for private sector investments.
6.1 TRANSFORMER MANUFACTURING
A total of 6,595 transformers of different capacities were utilized in the country with
aggregate capacity of 788MW. In order to achieve the government’s objective of
connecting one million customers up to 2012, a total of 60,000 transformers will be
required. It is also estimated that an additional 2,000 transformers will require repairs
annually. This provides a very good investment opportunity for manufacture and repair of
transformers. In addition, there exists a high potential for manufacturing of other related
equipment such as switchgears, insulators and electricity energy meters. Indeed, the
proposed factory for the manufacture of transformers will also benefit from both the EAC
and COMESA markets.
6.2 GEOTHERMAL DEVELOPMENT
The geothermal resources in Kenya are concentrated in the Rift Valley of Kenya with an
estimated potential of over 4,000 MW. Out of this resource potential 165MW has been
developed for electricity generation.
Appraisal geothermal wells have been drilled in Olkaria IV Geothermal field for
development of a 70MW electric power plant as well as another Six wells with an
average output of 5MW per well. Drilling of twelve (12) steam production wells will
commenced in 2008 , thus raising the number of wells needed for the proposed 70MW
power plant to 18. As a parallel initiative, preparation of tender documents for conversion
of steam into electricity will commence in December 2009. It is intended to have a
continuous drilling campaign to provide adequate steam for development of another
490MW of geothermal plants as follows: a) 70MW Olkaria IV power plant and Longonot I 70 MW by 2012,
b) Menengai I 70 MW by 2013,
c) Menengai II 70 MW by 2014,
d) Longonot II 70 MW by 2015,
e) Suswa I 70 MW by 2016,
f) North Rift I 70 MW by 2018and
g) North Rift II 70 MW by 2019.
A special purpose Kenya Government owned Company, Geothermal Development
Company (GDC) has been registered to undertake geothermal resource assessment
activities. These activities are currently undertaken by KenGen, which is also involved in
the development of power plants and production of electricity. GDC will float tenders for
conversion of steam into electricity. Private Sector Companies will be expected to bid
alongside KenGen for such steam to electricity power conversion projects. The lowest
price evaluated complaint bidder will be awarded 20-year contract during which period
GDC will guarantee continuous availability of steam. Public private partnership will also
be encouraged to minimize perceived investor risks.
6.3 PROPOSED 300 MW COAL FIRED PLANT
The Government of Kenya commissioned a feasibility study on the establishment of a
300 MW coal power plant in Mombasa. It also identified three suitable sites for the coal
plant. The plant will require 0.9 to 1.1 million tones per year, all of which will have to be
landed at the Mombasa port and transported to the power station. The port currently has
only two berths capable of unloading coal. However, both are not capable of handling
this additional large amount of coal.
Given these constraints, the study has identified and recommended Mdugani (Dongo
Kundu) within Mombasa harbour as the most feasible site for coal handling facility
because of the availability of ample space, minimal coal handling between ship and plant.
Also similar power plants can be constructed in the vicinity in future taking advantage of
coal unloading facility and grid connection to be provided.
There is therefore an investment opportunity in a coal handling facility whose estimated
cost is US$ 160 million. The facility can also be used to serve other coal users such as
cement factories in Kenya and the region.
6.4 COAL EXPLORATIONS AND EXPLOITATION
The Government of Kenya is currently carrying out coal exploration in the Mui basin in
Mwingi district, which covers an area of 400km2. This basin is 180 km North East of
Nairobi. So far thirty three (33) wells have been drilled with depths ranging from 75 to
324 metres and coal seams encountered in twenty (20) of the wells. Coal sample analyses
have revealed that the coal is sub-bituminous to bituminous in quality, with an average
calorific value of 18MJ/kg.
Coal exploration has reached a commendable stage as three (3) new wells with coal
seams thickness of 13 metres, 5.37 metres and 4.20 metres have been sunk this year.
Seventeen (17) wells previously sunk have coal seam thicknesses ranging from 0.3
metres to 12.6 metres. These coal seams have been discovered at depths ranging from 20
metres to 320 metres below the ground. An area of about 20 km2 has been delineated as a
coal zone.
To determine the quantity and quality of the coal deposits, the government has floated a
competitive tender for drilling of twenty (20) appraisal wells in Kateiko – Yoonye area
covering 40 Km2.. The successful bidder will in addition to drilling the 20 wells be
expected to estimate the commerciality of the coal deposits. If commercial deposits are
ascertained, a concession will be granted to a private developer through an open
competitive tender.
To accelerate coal exploration, the governmnt has also created three more Coal
exploration blocks in the Mui basin, which shall be leased to prospective investors for
exploration and exploitation.
The next coal basin for development is Taru basin that runs across Kwale and Kilifi
Districts in Coast Province of Kenya. Geologically, this basin is in the Karoo system,
which resembles the coal producing system of South Africa. The Karoo system is known
for high quality coal. The Taru basin Exploration is scheduled to start soon after the
conclusion of the Mui basin project.
6.5 HYDROPOWER DEVELOPMENT
Kenya’s latest power development plan has identified a number of potential hydropower
plants. Although the plants have not been considered economic in the past, recent oil
price increases now make them attractive for investment. The best among the
undeveloped hydropower sites are:
(i) Mutonga on the Tana River with an expected capacity of 60 MW and an annual
average electricity generation of 336 GWh. The estimated cost of construction is US$
270 million.
(ii) Downstream of the Mutonga site is the Lower Grand Falls with a capacity of 140
MW and annual average electricity generation of 715 GWh. The estimated cost of
construction is US$ 600 million.
These sites provide a good potential for investment in hydropower.
6.6 RENEWABLE ENERGY
a) Solar Electricity Generators
Kenya lies astride the equator and therefore has a high potential for Solar Energy
There is a vibrant solar energy market that has developed over the years for providing
electricity to homes and institutions remote from the national grid and for medium
temperature water heaters for domestic and commercial usage. A preliminary survey
done in 2005 established that the annual market demand for Photo Voltaic (PV) panels
was 500-kilowatt peak (kWp) and this was projected to grow at 15% annually. A
government programme, which commenced in 2005 to provide basic electricity to
boarding schools and health facilities in remote areas, has increased the annual demand
for PV panels by 100-kilowatt peak. Out of approximately 3,000 eligible institutions, 133
have been equipped with PV Systems with a combined capacity of 399 kilowatts peak in
the last four years. Another 46 institutions are earmarked to benefit from installation of
PV Systems with a combined estimated capacity of 80 kilowatts peak. There is also the
wider market provided by the other member states of the East African Community and
COMESA. It is estimated that the initial market demand for PV Systems is one-megawatt
peak and this presents a great opportunity to investors in PV panels manufacture. An
opportunity also exists for manufacture of associated components and accessories, such
as charge controllers, inverters and PV batteries.
b) Wind power generation
Preliminary wind resource assessment shows that wind regimes in certain parts of
Kenya (such as Marsabit, Ngong and the Coastal region) can support commercial
electricity generation as they enjoy wind speeds ranging from 8 to 14 metres per second.
This preliminary assessment has been used to develop a wind map for the whole country.
To facilitate decision-making in wind power generation investment, the government is
undertaking wind data logging in high potential areas of Kenya. However, detailed
feasibility studies would be carried out to determine the viability of specific sites
identified in the wind map. The Kenya Government would, therefore, like to invite the
private sector to invest in wind power electricity generation.
6.7 DEVELOPMENT OF A 300 – 1000 NUCLEAR POWER PLANT
Kenya’s natural resources for development of low cost and affordable electricity are
currently very limited. Given this situation, the Government has decided to diversify
power generation sources, away from the very high cost oil based power plants, in order
to make the cost of electricity affordable.
Nuclear power generation has therefore been identified as a potential source capable of
providing affordable electricity to spur economic growth, consistent with Kenya’s Vision
2030 development agenda. For a start it is proposed that the private sector will be given
an opportunity to develop a 300 – 1,000MW nuclear power plant over the next 7 years. A
Build Own Operate Transfer (BOOT) model based on 30-year power purchase agreement
(PPA) will be offered to a private sector investor with requisite experience and resources
to construct and operate the power plant.
6.8 EXPLORATION OF HYDROCARBONS AND PETROLEUM
There are huge investment opportunities in the exploration of hydrocarbons and
Petroleum in the North Eastern parts of the country.
COMMUNICATIONS TECHNOLOGY SECTOR
The Kenya’s Information and Communication sector is currently experiencing vibrant
business activities ranging from telecommunication services, information and
broadcasting, information technology services and many others. This has been due to
prevailing liberalization policy that allows competition in the sector leaving the
Government to play the role of a facilitator.
In light of the above, the ICT sector in Kenya provides investment opportunities in the
following areas:
6.9 BUSINESS PROCESS OUTSOURCING PARK
The BPO sector in Kenya is expanding rapidly with a large increase in the number of
companies and seats. BPO in Kenya is attractive, given large pools of cheap and high
quality labour. This has attracted customers both from around the world and from within
Kenya. Kenya plans to expand and grow the BPO industry further by establishing a state
of-the-art BPO Park.
The Government of Kenya is also in the process of designing a comprehensive set of
incentives to improve the attractiveness of Kenya as a BPO destination. The incentive
levels will be competitive to those offered by other countries. Furthermore, the
environment of doing business has been improved (e.g. ease of obtaining licences, filing
tax returns and obtaining economic justice) to lower transaction costs. A “one-stop shop”
for all investor needs (e.g. licensing and recruiting) will be housed within the BPO Park.
The Business Process outsourcing industry presents investment opportunities in the
establishment of the BPO Park, telecommunications infrastructure and establishment of
training institutions for the required BPO skills among others. The Government of Kenya
will provide land in Nairobi for establishment of the park.
6.10 Data centers and recovery site
A secure information system requires a data center and recovery site. The Government
of Kenya plans to establish Data Centres to provide storage for all Government databases.
In addition, the Neutral Data Centre (NDC) will provide world-class services to
government ministries, departments and agencies, private sector operators and
businesses. This provides investment opportunities to interested companies.
6.11 Government Applications
Investment opportunities exists in National Identity Cards//Passport, Driver’s License,
Motor Vehicle log books, Payroll, Pension, Land Information System / Local Authorities
and rates collection.
6.12 Film Industry and Content Development
The major goal of the film industry is to become a significant player by developing a
major motion picture production industry with sufficient employment, and capitalizing on
the economic, social, and cultural rewards associated with such industries worldwide.
Investment opportunities exist in the development of creative and technical skills, mass
media facilities and equipment; development of information, education and
communication services, film administration and facilitation among others. The
government of Kenya has also embarked on initiatives aimed at leveraging on digital
content to unlock new opportunities to conduct business. This presents viable investment
opportunities.
6.13 Multimedia Technology Parks (MTPs)
Currently, most if not all ICT products (hardware and software) are imported into the
country. In order to uniquely address the ICT needs of the country in a more productive
way, the government plans to establish Technology Parks that will be equipped with
facilities which will be used to develop ICT products for local needs as well as for the
export purposes.
The government considers establishment of an ICT Park as a top priority since they have
a significant potential to contribute to ICT infrastructure development in particular and
enhancement of economic growth of the country in general. The government has already
identified the land where the first ICT Park would be established. This will be a Public
Private Partnership initiative where internal investors will be invited to venture.
6.14 Software and Hardware Development
The government is promoting locally produced software and hardware in order to help
build skills and capacity in the assembly of the various hardware components into
complete IT equipments. Because of the favourable fiscal policy environment on ICT
hardware, and the relatively low cost of domestic labor, it is anticipated that per unit price
of such locally assembled IT equipments will be relatively much lower than an imported
one. Investors are therefore invited to take the advantage and invest in hardware and
software development locally.
Manufacturing sector
6.15 Development of Industrial and Manufacturing Zones
In order to harness the resources available in different parts of the country, region
specific industrial and manufacturing clusters will be promoted. Necessary infrastructure
and services will be provided to stimulate development of these clusters.
Special Economic Cluster (SEC) will be set up in Mombasa to allow for easy importation
of necessary raw materials and exporting of finished goods. The project will include an
agro-industrial zone incorporating activities like blending and packing of fertilizers, teas
and coffee and a consolidated meat and fish processing facility. The second SEC will be
located in Kisumu to allow for access to regional markets and availability of limestone to
support cement, chemicals and metals industries; agro-processing through increased
horticultural production along lakeshore.
6.16 Development of Small and Medium-Enterprises (SME) Parks
SME industrial parks in key urban centres will be developed. This will entail
development of High Tech Parks, which will be set up in Nairobi because of proximity to
most important market, Eldoret because of location to high-potential agricultural area and
access to airport, Mombasa, Kisumu and Nakuru.
6.17 Micro and Small Enterprise (MSE) 2030 Initiative Project
To revolutionize and modernize the MSE sector efforts are being geared towards
upgrading the following sub-sectors in the manufacturing sector: Agro processing;
Chemicals; Electrical & Electronics; Building and Construction; Metal and metal works;
Motor vehicle; Pharmaceuticals Industry and so on. This presents major investment
opportunities.
6.18 Tyres Manufacturing Plant
The country currently has only one tyres manufacturing facility i.e. Firestone (E.A.)
Limited. The Government of Kenya is convinced that another tyre manufacturing facility
would be a feasible proposition.
Agro-processing industry
a) Processing of White refined Industrial sugar
Refining of industrial sugar is an area of great investment potential. It is a critical input in
food, beverage and pharmaceutical sectors. Currently, it is imported. There is a large
market for the inputs and the demand is growing.
b) Processing of Fruit Concentrates
Fruit processing is an industry, which is growing. Kenya produces only two type of
concentrate namely pineapple and mango. The rest of concentrates are imported outside
the EAC region. There are investment opportunities in the processing of other
concentrates.
c) Vegetable Oil Processing Industry
In some areas in Kenya, the oilseeds are grown commercially. This requires a very strong
oil seed processing industry to utilize the products and to sustain local production of
oilseed. This presents investment opportunities.
6.19 Chemicals industry
a) Manufacturing of fertilizers
Fertilizer is one of the major farming inputs in the country and it is widely used. Through
the fertilizer cost reduction initiative identified under the Vision 2030, the government
plans to put up a fertilizer manufacturing and blending plant in Mombasa and Nakuru to
serve the local and regional demand.
b) Manufacturing in dyes for textiles industries
There are investment opportunities in the manufacture of dyes, which are important for
the textile industry.
c) Processing of pyrethrum extracts
Pyrethrum is widely grown in Kenya. There are investment opportunities in processing of
pyrethrum extract.
BUILDING AND CONSTRUCTION INDUSTRY
6.20 Construction of low cost houses
In the last five years, there has been a robust growth in housing development. However,
there remains a very high and unmet demand particularly in the urban areas across the
country. Under the Vision 2030, a target of over 200,000 units per year is required. This
is largely expected to be met by the private sector investments.
As such, the government is ready to work out modalities of partnering with private sector
to construct and sell houses, including low cost houses to Kenyans. For example there are
100 ha available at Athi River, which is about 20 km from city of Nairobi for this
purpose. Alternatively investors can partner with National Housing
Corporation to put up houses on their parcels of land situated in Embakasi, Nairobi and
other parts of the country. Land can also be purchased around the urban areas from
private owners at a reasonable market price for housing projects. Returns on investment
in this sector have been very attractive.
6.21 Cement manufacturing
Currently, there are three cement producers in Kenya .The current total capacity for the
three cement producers is far much below the demand. There is growing demand of
cement from within and from outside the country from places such as Southern Sudan.
There is need for additional investment to cover the existing gap. Many areas in Kenya
have huge investment potential for cement manufacture especially in the rift valley and
West Pokot among other areas.
MOTOR VEHICLE INDUSTRY
6.22 Motor vehicle components manufacturing
There are investment opportunities in manufacturing of motor vehicle components. There
is a big market for vehicles in the EAC and COMESA regions.
IRON AND STEEL INDUSTRY
Kenya has large quantities of iron and steel that could be exploited for commercial
ventures. Large deposits are found in Kitui, Taita Taveta, Homa Bay and Kakamega.
The following are some of the potential areas for investment.
6.23 Manufacture of Aluminum Cans
In Kenya and East Africa region, all cans for use in packaging of canned beers and soft
drinks are imported. Consumption of canned beverages is becoming very popular. Export
of Kenyan beers in bottles is being hampered by the limitations of glass, which include
bulkiness and breakages. The production of beers and carbonated beverages in Kenya has
grown tremendously over the years. Investors are invited to put up an aluminum canning
plant, which can also cater for the needs of Uganda, Tanzania, Mauritius, Rwanda and
Burundi.
6.24 Component Manufacture
Design and Local Manufacture of components and parts for use in the steel plants with
capacities of 10-30,000 tons per annum which are very popular in the COMESA region.
The rate of growth of steel mills in the region has been steadily rising pointing to an
exciting business opportunity for whoever can supply such equipment with good sparepart back up and after sales services.
Currently these plants are being imported complete from India. There is no reason why at
least some of this equipment cannot be produced locally.
6.25 Manufacture of Ductile Iron rolls
There is only one country (Egypt), which is currently producing such rolls in the region.
Gauging by the over 20 mills in the country and the East Africa region at large, a great
deal of business opportunity exists in this field.
PHARMACEUTICAL INDUSTRY
6.26 Manufacture of medical equipment
There are vast opportunities for investment in the manufacture of medical equipment
including electro-medical equipment. Investment in such opportunities could be in form
assembly with target market being EAC and COMESA.
6.27 Pharmaceutical plants
Possible areas of investment in this area which however require further studies to
determine their viability include:
 Multipurpose chemical plant for bulk production of intermediate inputs such as
paracetamol, aspirin, etc.
 Chemical plant to manufacture the anti-tuberculosis, anti-leprosy, antibiotic
rifampicin from the penultimate state.
 Manufacture of Quinine by extraction from Cinchona bark and subsequent
purification and synthesis to Quinine sulphate.
 Extraction of Hecogenin from sisal waste and synthesis of Betamethasone from
Hecogenin.
6.28 Raw materials for pharmaceutical industry
Considering majority of the inputs used for making pharmaceutical products are
imported, there is a wide scope for investment in making of these inputs also the target
market being EAC and COMESA. There are many un-exploited medicinal plants in
Kenya.
TOURISM SECTOR
6.29 Development of Resort Cities
This is one of Kenya’s flagship projects in the Tourism Sector, which creates lucrative
investment opportunities and involves the development of three (3) high-end resort cities
– two at the Coast (North & South) and in Isiolo (North of Nairobi). Kenya has a long
coastline with beautiful sandy beaches that are very attractive to tourists. There will also
be a parks initiative, which will involve upgrade and development of under utilized parks
with an intention of offering quality niche experiences. These experiences include
cultural, eco-friendly and water-based tourism. The government will provide the
necessary physical infrastructure including land for the development of the resort cities.
6.30 Construction of International Hotel Chains
The Kenya Government has developed a strategy that intends to attract quality high-end
international hotel chains and encouraging investment in conference facilities. The
opportunities in the hotel industry provided by the unmet demand for and high occupancy
rates in key tourist areas.
Land for constructing such hotels is available and the Government will offer the
necessary support for such investments. With normal tourist arrivals, the demand for
accommodation exceeds the available bed capacity thus creating a demand for additional
bed capacity.
6.31 Investment in Conference Facilities
Kenya has three cities namely, Nairobi, Mombasa (the port city and entry point to East
and Central Africa) and Kisumu (on the shores of Lake Victoria). The three cities offer a
myriad of experiences. Kenya currently has only one large international conference
centre (KICC) with a capacity of 2,000 delegates in Nairobi. With the ever-increasing
demand for conference/convention and exhibitions, the destination will require
investment in this niche product.
Kenya is hosts to two major UN organizations namely the United Nations Environment
Programme and the United Nations Habitat. Nairobi, the capital city, is also rapidly
becoming a regional business and financial services hub. These are some of the factors
that make the demand for conference facilities high and therefore attractive for
investment. Due to its strategic location in the East African Community Region, Kisumu
offers viable opportunity for investment in hotel and conference business.
6.32 Entertainment Options – Amusement Parks, Clubs, Casinos, Theatres,
Specialty Restaurants
A lot of potential exists in the entertainment area. Investment in these areas will also add
value to holiday experiences. With a growing economy and tourism sector, there is an
increasing demand for entertainment options that include amusement parks, clubs,
casinos, theatres and specialty restaurants.
6.33 Investment in Waterways in Kenya
Waterways in Kenya have not been fully exploited and developed as a leisure product.
Therefore investment is required in the Western Kenya Circuit where the massive Lake
Victoria connects the EAC countries of Kenya, Uganda and Tanzania, Rwanda and
Burundi.
TRANSPORT AND INFRASTRUCTURE SECTOR
Infrastructure investments require enormous financial resources that cannot be adequately
met from public sector finance. The government is therefore seeking private capital
support for investment in the areas identified below.
6.34 Construction of five star hotel and conference facilities
Kenya Railways has a golf course within the proximity of city center. The prime piece of
land is attractive for development of a five star hotel overlooking a 9-hole golf course
with conference facilities, theater and shopping mall. Feasibility study has been done and
the project tendered to developers.
6.35 Construction of lake view resort in Kisumu
Construction of lake view resort in Kisumu on Kenya Railways land measuring 20 acres
situated on the shores of Lake Victoria. The project involves establishment of a 5 star
hotel-400 rooms; conference facilities for over 2000 people; office park 10 commercial
buildings; car park for 2000 cars; entertainment and recreation areas; shopping malls and
business process outsourcing park. Detailed design and feasibility study are on-going.
6.36 Development of a free Port
Development of a free trade area within Kenya Ports Authority at Dongo Kundu is one of
priority projects under vision 2030. A total of 3000 acres of land is available for
investment in Dongo Kundu, south mainland. Participating firms may seek fiscal and
physical incentives to locate in the zone.
6.37 Development of cruise ship facilities
Kenya as a tourist destination has few cruise ship experiences despite being endowed
with a long coastline in the Indian Ocean. There is great potential for more cruise ships
that may connect Mombasa, Lamu, Zanzibar, Dar-es-salaam, and Seychelles.
Opportunities exist for the development of cruise ship facilities at both ports of Mombasa
and Lamu, which have a high economic potential given that 75% of tourists are normally
destined for coast. Design of the proposed cruise terminal in Mombasa has been carried
out and is ready for implementation.
6.38 Development of airport infrastructure and services
A study done in 2005 on private sector participation in airports infrastructure and services
in Kenya showed some airstrips situated in tourist circuit areas of Masai Mara and south
coast of Mombasa can be viably developed on BOT or BOO terms.
6.39 Development of a dry dock port and a car bazaar
The new mandate of Kenya Railways is management of non-conceded assets. It has plans
to develop a concept which is aimed at establishment of a dry dock port and a car bazaar
on a 100 acre piece of land at Voi, 100km from the port of Mombasa. The features of the
proposed car bazaar will include: storage and clearing facilities for imported vehicles,
facilities to store and sell cars to prospective customers and support facilities/amenities
e.g offices, banks, hotel and restaurants. Investors are welcome to partner with Kenya
Railways in this venture.
6.40 Construction of a second port
A second port is needed to sustain the growing need for access to sea brought about by
the heavy demands of south Sudan and land locked Ethiopia. It has been recognized for a
long time now, that Kenya as the principal gateway to sub region, needs an alternative
port. A study carried out in 1975 identified Lamu as a suitable alternative.
If the port is developed, it will require a railway line and a road to connect it with inter
land.
6.41 Concessioning Northern Corridor
A study carried out in 2003 on road concessioning showed that the Northern Corridor
(Mombasa – Nakuru – Mau Summit – Malaba and Mau Summit – Kisumu-Busia) as
being viable. The study identified sections for concessioning as Mombasa-Machakos
Turn off (approx. 436), Machakos Turn off –Rironi (approx.107km), Rironi – EldoretMalaba (445km) and Mau Summit –Kericho-Kisumu-Busia(252km). The concession can
be done within the Kenya Roads Act (2007) which empowers the Minister to concession
road sections through tolling. The period is for 30 years and an after tax real rate of return
is 20% on an equity investment of 20% of project cost.
NAIROBI METROPOLITAN REGION DEVELOPMENT
The following areas of investment have been identified towards sustainable economic
growth and development as envisioned in the Metro 2030 Strategy.
6.42 GIS Planning and Mapping of the Metropolitan Region
Technical Assistance in institutionalizing a GIS-based spatial planning and management
at the Ministry level and the Metropolitan Local authorities, particularly Nairobi.
6.43 Provision of Non-motorised transportation
Traffic Decongestion in Metro Central Business Districts (CBD) involving integrated
traffic management systems to also include signalization of junctions, pedestrianisation
of streets, and provision of Non-motorised transportation inter alia.
6.44 Closed Circuit Television (CCTV)
Closed Circuit Television (CCTV) within the Metro Central Business Districts (CBD) to
improve efficiency on safety and security and reduce the cost of policing in the
Metropolitan area.
6.45 Nairobi Metropolitan Mass Rapid Transit Programme
To improve accessibility within the metropolitan region through a new bus system
with designated bus lanes. This will require investments in infrastructure and buses.
6.46 Rapid light rail
This will entail provision of light rail to ease traffic congestion and improve efficiency of
transportation between the central business district and other parts of the metropolitan
including the Jomo Kenyatta International Airport.
6.47 Parking system
Investment opportunities exist in the provision of both space and technology that
complements promotion of public transport.
6.48 Solid Waste Management System
There are huge investment opportunities in Solid Waste Management in the country
especially in Nairobi and other major cities of Mombasa and Kisumu.
AGRICULTURAL AND LIVESTOCK SECTOR
6.49 Sugarcane development
This will entail the expansion of the sugar factories both for increased sugar production
and power generation. Main areas will be expansion of Sugar Factories in South Nyanza,
consolidation and expansion of Nyando belt sugar factories in the Nyando Basin and
expansion of sugar factories in Western Kenya.
6.50 Value Addition
This programme will involve value addition in several agricultural commodities
including Tea, Coffee and Fruits. The main projects will include decaffeinated tea,
various branded teas, instant Coffee and processed coffee, Mango/citrus processing in
Eastern, Coast and Nyanza and Banana processing in Central, Eastern and Nyanza.
6.51 Marketing Infrastructure
This will involve the following wholesale projects: Two wholesale markets for fresh
produce in Nairobi, a wholesale market in Nakuru and a wholesale market in Mombasa.
6.52 Bio-fuels
The programme will establish a Jetropha/sorghum based biofuel plants. The envisaged
projects include: Production and processing of Jetropha and production and processing of
sweet sorghum in Galana and other areas of the country.
LIVESTOCK SUB-SECTOR
6.53 Development of Disease Free Zones
Livestock production is one of the major activities in the sector. It is practiced in all parts
of the country either under the pastoral extensive system in the Arid and Semi Arid areas
(ASALs) or under intensive, ranching and smallholder systems. The pastoral and
commercial ranch systems traditionally contribute to the supply of beef and small stock
meat. Livestock production in the ASAL accounts for nearly 90% of the employment
opportunities and nearly 95% of the family incomes. It also accounts for about 40% of
the Agricultural GDP.
Investment opportunities exist in the livestock sector especially in the development of
Disease Free Zones mainly in these regions. This will include the construction of satellite
abattoirs, hides and skins industries in Isiolo, Wajir and Garissa near the airstrips and
where the government has invested heavily on sanitation facilities.
6.54 Improved Breeding Programme
With increased demand of livestock products in the export market there will be need to
improve the livestock breeds to increase the quality and productivity of animals for better
prices. This also offers investment opportunities.
6.55 Water and Irrigation
With increased demand for food and the un reliability of rain, development of irrigation
has become critical. There is therefore opportunity to invest in building dams and canals.
The projects in this area not only touch on Agriculture and Livestock but also Tourism,
Hydropower Generation, provision of water to Communities, etc and thus making the
projects very viable.
6.56 Water Storage and Supply Programme
Through the Public Private Partnerships, there exists opportunities in the development
and management of water supply. The Specific areas of investment include;
a) Expansion of Mzima water pipeline to Taita Taveta and Mombasa;
h) Expansion of infrastructure in satellite towns;
i) Construction of 180 new water and sanitation projects in rural areas;
j)
Drilling & equipping of boreholes and Construction of 160 small dams/water
pans in ASAL areas;
k) Expansion of water and sanitation in the proposed resort cities.
EDUCATION SECTOR
6.57 Education Expansion Programme
There is need to expand the secondary education in Kenya to increase the absorption and
intake from the primary schools (transition rates). Construction of private secondary
schools is encouraged and this offers excellent opportunities for investors in this sector.
Similarly there is a high demand for university education. Out of the secondary school
leavers who qualify to enter university, only 20 per cent are admitted to public and
private universities, forcing many able parents to send their children overseas. There is
therefore a great investment potential for private investors in the higher education subsector.
6.58 “Centres of Excellence” Programme
There is need to improve the quality and relevance of training in Kenya in order to
develop a pool of qualified personnel for efficient and effective service delivery to
support all sectors under Vision 2030.
This requires investment in developing “centres of excellence” in the key areas. There are
huge opportunities in this area particularly the hospitality industry, engineering and
information technology to produce high skilled manpower.
CONTACT INFORMATION
For more information contact:
Chief Executive Officer
Kenya Investment Authority
P.O. Box 55704, 00200, Nairobi, Kenya
Telephone: 020 2221401 -4
Email: info@investmentkenya.com
Website: www.investmentkenya.com
Location: Kenya Railways Headquarters, Block D, 3rd Floor
or
The Permanent Secretary
Ministry of State for planning National Development and Vision 2030
Treasury Building, PO Box 30005, 00200, Nairobi, Kenya
Telephone: +254 020 252299 Ext: 101?328
Email: psplanning@treasury.go.ke
Website: ww.planning.go.ke